Next time you see some info on the news or a realtor posts some data about home prices, pause and verify what the data is really about? We often see postings about how homes prices are changing or sales slowing, but they either refer to California or the United States overall. The Bay Area is very different from the rest of the State and even more different from the Nation. Remember that not only is real estate local, but our home prices are more tied to stock market performance than any other region due to our unique economy and regional IPO wealth creation. Furthermore, in most places across the U.S there is still plenty of empty land to build on, we got next to nothing here so Bay Area land values are extreme by comparison.
Since 1998, single family home prices have increase about 300% in San Mateo County. Believe it or not, the average single family home in 1998 was almost $500,000 in San Mateo County as compared to $180,000 nationwide. However, during this same time span home prices nationwide have only increased by 111%; the Bay Area’s has tripled the home price appreciation experienced by U.S. as a whole.
So next time you hear or read about real estate stats, pay attention regarding whether it’s about the Bay Area specifically because otherwise those numbers may not mean much.